A version of the following was article was originally published at the Globe and Mail.
The long-awaited Cullen Commission’s final report into money laundering in British Columbia, released this month by B.C. Supreme Court Associate Chief Justice Austin F. Cullen, was as devastating as it was illuminating. In the coming weeks, experts and policy-makers will decipher the report and make pronouncements on how provincial governments and Ottawa can better prevent and prosecute money laundering. In doing so, however, they must consider the many ways in which money laundering is not just an economic crime, but a human rights issue. Money laundering is not a victimless crime.
In its 1,800 pages of facts and findings, the Cullen Commission concluded that the laundering of billions of dollars had gone “unchecked” since at least 2012, that successive B.C. governments had ignored the problem, and that the RCMP’s efforts to investigate money laundering were woefully inadequate. While the commission did not focus on human rights, understanding how money laundering is a human rights issue is a crucial step if authorities are to wake up to the harm this crime does and adequately address it.
In my work on political violence and mass atrocities, money laundering comes up regularly as a commonplace transnational organized crime, one that fuels human rights abuses. It is not unusual for people to assume that money laundering primarily happens in countries with inadequate legal frameworks, porous regulations, long-standing corruption, and weak rule of law. But that is far from the truth.
Terrorists, traffickers, autocrats and corrupt foreign politicians see Canada as an ideal place where they can hide and “clean” their ill-gotten gains.
According to testimony given to the Cullen Commission by professor Jason Sharman of the University of Cambridge: “As a multicultural society with a large stable financial sector, there’s temptation for foreign corrupt officials to use the Canadian financial system or perhaps bits of it, like Canadian shell companies, to help in laundering money derived from corruption offences committed in other countries.” A 2019 U.S. State Department report listed Canada alongside China and Afghanistan as a “major money laundering country.” Money laundering in Canada even has its own name: “snow-washing”.
Canadian institutions have been ignoring their complicity for a long time. Years ago, an investigator told me that a Canadian bank he had worked for had willfully ignored his advice to reject the business of an alleged organized criminal from a foreign state who had reportedly been involved in violent crimes. It was shocking, but not surprising. As “one-stop shops” welcoming dirty money, Canadian banks have profited from money laundering for years, and done little to address it. Canada is known in international crime circles as a safe place for money launderers, where questions often won’t be asked and evidence of the criminal sources of funding will be regularly ignored.
Canada is open for business and closed for accountability.
Human traffickers, terrorists, and drug traffickers launder money almost invisibly through Canadian financial institutions, but as the commission’s final report put it, “Money laundering has, as its origin, crime that destroys communities… These crimes victimize the most vulnerable members of society.”
Think about that for a moment. Canada is a safe haven for money predicated on the oppression, violation, and subjugation of people by criminals who prey on them and who view vulnerable people not as human beings, but as economic opportunities to exploit.
The only way that criminals like traffickers and terrorists make money is by exploiting and harming their victims, by treating them as property, by selling them into illegal labour or sex markets, or by killing, torturing, and stealing from them. The wealth such networks generate is money made off the backs of systemic human rights violations. Laundering their funds whitewashes criminals of their crimes and makes our governments, banks and financial institutions complicit in their underlying human rights abuses.
So, what can be done?
First and foremost, money laundering should not be understood as merely an economic crime, but a human rights issue. Framing it as such would entrench real and tangible obligations on the government to act to prevent money laundering. That could include addressing the root causes of organized crime, such as how Canada’s approach to drug control fuels money laundering, as advocated by the British Columbia Civil Liberties Association.
Ottawa’s response to the Cullen report was meagre, with the Department of Finance stating that “the government is already taking action to address many of the issues identified by the Commission.” That is not good enough. Dealing with money laundering should be linked coherently to efforts to address human trafficking, terrorism, drug trafficking and other international and transnational crimes and human rights violations.
Second, any companies and individuals involved in money laundering – including any financial institutions – should be investigated, fined and, where necessary, prosecuted for their involvement in this criminal conduct. It is not enough to simply go for the small-fish petty criminals or foreign agents. A true reckoning of the scale of money laundering in Canada requires that institutions wielding great power and prestige be investigated for turning a blind eye or, worse, profiting from the activities of traffickers and terrorists.
Finally, the federal government and its provincial counterparts should commit to a victim-oriented approach to addressing money laundering and associated crimes. Too often, victims and survivors of terrorism and trafficking have to fend for themselves, the harms committed against them left to fester rather than heal. A victim-focused approach might require any illicit proceeds made by Canadian institutions to be seized by courts or regulators, in order to fund a reparations regime that would help repair the lives of those harmed.
The promise of a human-rights-centred approach to money laundering is simple but significant: it would undermine the ability of traffickers, terrorists, and atrocity perpetrators to be profitable.
If the money runs dry, human rights violations might not only be less lucrative, but less pervasive.